16 States in Germany Greenlight the Federal Gambling Treaty

The latest version of Germany’s federal gambling treaty was accepted by 16 landers (states) recently. Though it brings good news for the country, it only means that larger decisions will be postponed for the time being.

The heads of the 16 states met in Berlin on Thursday, voting in favor of a ‘toleration’ policy for sports betting operation. This will mean that the status quo remains till June 30, 2021, and buys some time for the government to take major decisions about the industry. Operators will be allowed to seek licenses later in 2019, and stopgap permits will be issued starting January 1, next year.

The treaty has not been approved by the European Commission yet. The body has historically had a dim view of Germany’s previous attempts to liberalize its sports betting market. A 2012 treaty created controversy owing to cap on the number of licenses issued in the country. The new treaty comes with equally controversial provisions, like banning online casino products.

It was only the northern state of Schleswig-Holstein that does not follow the same path as other landers. It issued about two dozen licenses for online casino products in its region seven years ago. The licenses have expired now, and the state’s governing coalition recently introduced legislation that will extend their validity to June 30, 2021, when the current stopgap treaty expires. The states expect that there will be a national consensus on the operation of online casinos by this time.

But the Schleswig-Holstein doesn’t dismiss the stopgap treaty. State parliamentarian Hans Jörn-Arp hailed the treaty as “a great success” as the other states have upheld their right to adopt a different approach towards online casinos. Now, the state is looking forward to offering a “legally sound base” to its casino licensees and guarantee them cash flow while protecting their consumers from data misuse and the harms of addiction.

The German Sports Betting Association (DSWW) was not pleased with the treaty and said that it doesn’t answer the structural deficits that were found in the previous treaty. They urged the leaders of the state to continue negotiations for a fundamental reform of gambling regulation in the country. They have raised concerned about the treaty’s lack of provisions for in-play betting, which is common in other mature markets and command 2/3rd of the total betting turnover. They also have objections about the treaty’s betting limit of €1k per month. They are warning that the treaty will fail to achieve its goals as it ignored customer wishes and social realities completely.

German lottery bosses are also a part of the displeased lot, and they want a more aggressive stance from the state leaders towards internationally licensed online gambling operators that serve German customers. Georg Wacker, chief of Lotto Baden-Würtenberg asked the government to enforce the law more forcefully and introduce new measures to impose payment-blocking and domain-blocking for foreign operators.